Updated: October 11, 2021 7:19:15 am
Six years ago, around the time desperate homebuyers approached courts against Unitech Group promoter Sanjay Chandra, his wife Preeti Chandra set up an offshore family trust structure and changed her nationality, records in the Pandora Papers investigated by The Indian Express show.
Records of corporate service provider Trident Trust show that Unitech Group defaulted as early as 2009 on servicing a $210-million loan from Credit Suisse for investing in realty projects in India.
Last Monday, Preeti Chandra and Sanjay Chandra’s father Ramesh Chandra were arrested by the Enforcement Directorate probing the Unitech money laundering case. In March, the ED had stopped her from boarding a flight at Delhi. The agency claimed she was “involved in laundering and layering of funds deposited by home buyers”.
Earlier this week, the Supreme Court cleared a “full-fledged criminal investigation” into allegations of collusion of certain officials of Tihar jail with Sanjay Chandra and brother Ajay Chandra while they were lodged in the jail. In August, both were ordered to be separated and moved to jails in Mumbai.
Between her husband’s arrests in 2011 in the 2G spectrum scam, and in 2017 for allegedly cheating homebuyers, fashion designer Preeti Chandra, still an Indian citizen, incorporated two companies and a family trust in the British Virgin Islands.
Formed in March 2015, Trikar International Inc (BVI), was to hold assets for the family trust, which was being set up with Preeti as protector. Bellmora Ltd (BVI) was incorporated as the “named beneficiary in the Chandra Family Trust” in May 2015 to hold investments in UAE and India, and a bank account in Emirates NBD, Dubai.
The Chandra Family Trust held all 50,000 shares of Trikar International, which was funded by Trikar Advisors DMCC (Dubai); Trikar General Trading FZE (Sharjah); and “fashion designing businesses.”
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In September 2015, Preeti signed a declaration of solvency, vowing that “no event has occurred which I have reason to believe will result in a claim being made against me by any third party” and that none of her assets “have been derived from” money laundering.
In April 2016, Preeti got her passport from the Commonwealth of Dominica, which does not have an extradition treaty with India.
And a month later, she transferred all shares of Trikar General Trading FZE (Sharjah) from Trikar International to herself for 150,000 dirhams.
By the end of 2016, she decided to dissolve the family trust and Trikar International. In a self-certification in April 2017, Preeti declared herself to be a tax resident of UAE and Dominica.
Preeti Chandra and a Dubai-based Indian chartered accountant, who served as director in Trikar International (BVI), did not respond to queries from The Indian Express.
Records in the Pandora Papers also show how Credit Suisse raised the alarm over two “related entities of Unitech Group” in Cyprus even as Unitech Group hit market turbulence.
Between January and July 2008, Credit Suisse (Singapore) lent $210 million (then around Rs 850 crore) to the two Cyprus companies for investing in land and real estate projects such as hotels and SEZs in India.
The loans were collateralised with Unitech Group stock at 325 per cent of the value. In addition, the shares of the Cyprus entities — Dareno Holdings Ltd and Rockslide Investments Ltd — were pledged, along with shares in underlying Indian firms.
As of June 2008, Dareno Holdings, which borrowed $165 million from Credit Suisse, had made investments worth $116 million through 49 per cent JVs with Vectex Holdings Ltd (Cyprus, $25m) and Crowbel Holdings Ltd (Cyprus, $40m); and in 100 per cent subsidiaries Ranchero Services Ltd (Cyprus, $12m), Hedisa Holdings Ltd (Cyprus, $18m), Albium Holdings Ltd (Cyprus, $15m) and Legal Value Technology Services Pvt Ltd (India, $6m).
The same year, amid a severe credit crunch in the market, Unitech stock crashed from Rs 500 to below Rs 80. And the company sought time and restructuring, pledging extra stock and promising to “slowly pay off” the outstanding.
During this period, a UK executive of Trident Trust Company, which handled several offshore entities for the Chandras, suggested in an internal email that the financials of the Cyprus firms worried Credit Suisse, auditors noting their inability to “opine on value of projects underneath beyond cost”.
The lending was anyway “based on expected long-term value when hotel was developed and sold, not today’s value” and “when it came to the ‘crunch’, Credit Suisse are only thinking today CYA (cover your a**),” the Trident executive wrote.
By May 2009, Dareno Holdings and Rockslide Investments defaulted on their debt and Credit Suisse held their shares until October 2009.
The records also show that in October 2007, Credit Suisse offered a $40 million facility to Sanjay Chandra for buying a pre-owned Bombardier Global Express aircraft. But they do not show if the loan materialised.
In an email, a Credit Suisse spokesperson said: “Credit Suisse does not comment on potential or existing client relationships. Credit Suisse conducts its banking business in compliance with all the applicable laws, rules and regulations in the markets in which it operates.”
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